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An early years funding formula

Philippa, Assistant Director of Education at CDC, gives her take on the early years funding issue and unpicks what it really means for children, young people and schools.

There are some key funding considerations in the early years documents that were published in December, Early years funding: changes to funding for three- and four-year olds: Government consultation response, and an accompanying document, Early years national funding formula: Operational guide. These documents are published following an earlier consultation so, whilst they do not invite responses, they really need our attention. As with the high needs funding consultation, these documents look at both ‘universal’ funding and specific aspects of funding for young children with SEN and disabilities. Again, as with the schools funding, there has been much discussion in the press about the mainstream aspects of early years funding but there has been less about the SEN and disability aspects.

Firstly, the DfE has recognised that the current early years funding system ‘does not serve the needs of children with special educational needs and disabilities consistently’ and is going ahead with two key proposals on which they consulted earlier: a Disability Access Fund and a local SEN inclusion fund.

The Disability Access Fund (DAF) will provide a small amount of additional funding to enable early years providers to anticipate and make adjustments, and will increase their capacity to support disabled children. Providers will receive an additional annual amount for young children in receipt of Disability Living Allowance. DAF will be introduced in April 2017 and will provide £615 per year for eligible children.

A local SEN Inclusion fund: the DfE will require local authorities to have an SEN inclusion fund by April 2017. Local authorities will be required to consult widely, and to publish a range of information about the SEN inclusion fund in their local offer. This fund is intended to make it easier for providers to access funding to support children with SEND. It sits alongside the increased free entitlement for three- and four-year-olds, which is the main focus of both documents. The SEN inclusion fund is clearly intended to address the problem of early years access, recognised in the earlier consultation, and to make it easier for families to take up their free entitlement.

A research report to the DfE in 2015 highlighted an early years inclusion fund that had been established in York. York evaluated their fund and showed that young children were being identified earlier, being referred for earlier assessment and advice; children were more likely to stay in their own local early years setting; careful tracking of progress showed improvements in progress and better outcomes for children; and more comprehensive information smoothed transition into school. Support services played an important part in recommending interventions and identifying approaches to maximise children’s learning and development. The DfE SEN inclusion fund appears to be modelled on the York approach, but here’s the conundrum:

The DfE is expecting the majority of early years funding to be passed straight on to early years providers, 93% of the funding in 2017-18, and 95%, from 2018-19. There is some debate about this level but the concern for children with SEN and disabilities is what counts against the ‘pass-through’ rate of 93/95%. The guidance encourages the use of the fund for individual ‘top-up’ grant but adds ‘Local authorities can also use part of their SEN inclusion fund to support specialist SEN services in their local area. However, any funding used in this way will not count towards the high pass-through.’ The York experience, and experience elsewhere, indicates the importance of early years providers having swift access to advice from specialist local services. Without advice on, for example, the best interventions, settings may lose time working out how best to respond to a child’s needs and lose the intended advantage of early intervention.

So, should specialist early years services be counted as part of the retained local authority management and administrative costs or are they ‘individual child costs’ and sit in the 93/95% pass-through side of the funding? Whilst it’s not a consultation, anyone with concerns about the role and positioning of specialist early years services may want to follow up with the DfE. The Special Educational Consortium is writing to the early years Minister about it.